Tur­bu­lent week ends with stocks down 4%

Wall Street capped a tur­bu­lent week of trad­ing Fri­day with the big­gest weekly loss since March as traders fret over ris­ing trade ten­sion be­tween Wash­ing­ton and Bei­jing and sig­nals of slower eco­nomic growth.

The lat­est wave of sell­ing erased more than 550 points from the Dow Jones in­dus­trial av­er­age — bring­ing its three-day loss to more than 1,400. For the week, ma­jor in­dexes are down more than 4 per­cent.

Wor­ries that the testy U.S.-China trade dis­pute and higher in­ter­est rates will slow the econ­omy have made in­vestors un­easy, lead­ing to volatile swings in the mar­ket from one day to the next.

On Mon­day, news that the U.S. and China had agreed to a 90-day truce in their es­ca­lat­ing trade con­flict drove stocks sharply higher, adding to strong gains the week be­fore. But the next day, as doubts mounted over the like­li­hood of a swift res­o­lu­tion to the trade dis­pute, stocks sank.

That sell-off ex­tended to Thurs­day, when U.S. stock mar­kets re­opened for trad­ing af­ter a na­tional day of mourn­ing for for­mer Pres­i­dent Ge­orge H.W. Bush. An early plunge knocked 700 points off the Dow as in­vestors wor­ried that the ar­rest of a se­nior Chi­nese tech­nol­ogy com­pany of­fi­cial would un­der­mine trade ne­go­ti­a­tions be­tween Wash­ing­ton and Bei­jing, but stocks bounced nearly all the way back by the end of the day on news that the Fed­eral Re­serve was con­sid­er­ing a wait-and-see ap­proach to its in­ter­est rate hikes.

That op­ti­mism fu­eled a rally early Fri­day, but that faded into an­other sharp drop.

“We’re in a mar­ket where in­vestors just want to sell any up­side that they see,” said Lind­sey Bell, an in­vest­ment strate­gist at CFRA. “The volatil­ity we’ve seen the last cou­ple of weeks has been pretty ex­treme in both di­rec­tions.”

The S&P 500 in­dex fell 2.3 per­cent. The in­dex has ended lower three of the last four weeks. The Dow dropped 2.2 per­cent. The tech-heavy Nas­daq com­pos­ite slid 3 per­cent. The S&P 500 and Dow are now in the red for the year again. The Nas­daq was hold­ing on to a mod­est gain.

The cur­rent bull mar­ket for stocks — which be­gan in March 2009 — has shown signs of sput­ter­ing this year, with the S&P 500 en­ter­ing into a cor­rec­tion, or drop of 10 per­cent from a re­cent high, twice this year. The in­dex is now down 10.2 per­cent from its all-time high on Sept. 20.

The mar­ket is now on track for its worst year since 2008, when the S&P 500 ended with a 38.5 per­cent loss.

Volatil­ity has gripped the mar­ket since early Oc­to­ber, re­flect­ing in­vestors’ wor­ries that the Fed­eral Re­serve might raise in­ter­est rates too ag­gres­sively as it tries to keep in­fla­tion in check, po­ten­tially slow­ing eco­nomic growth.